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If you are a very small business, you may think that you want a TPA that “rubber stamps” all treatment requests, because you are the only one who will ever be injured. But beware!
A claim with substantial medical costs could get your company eliminated from group rating in two years.
Here’s an example when rubber-stamping is not a good idea: The employee hurt her shoulder at work. She was seen in the ER and got a diagnosis of strained shoulder. She was then seen by an orthopedist, who recommended 3 weeks of physical therapy (PT), and if no relief, injection into the shoulder. She started PT, and at each follow up visit was seen by a Certified Nurse Practitioner (CNP), who recommended that the PT continue, despite the patient’s complaints that her shoulder felt unstable. The MCO authorized 10 additional PT sessions, but I (the TPA) suggested that the patient be seen by a medical doctor instead. The doctor suspected a tear, and recommended evaluation by a surgeon.
If you were the patient, would you want the MCO to approve all requests, or would you want an MCO to review and actively manage your claim?

Will your company be well served by using an MCO and TPA that are sister corporations?
MCO stands for Managed Care Organization. Its job is to manage the medical care of the injured workers. It is paid a percentage of your premiums, so its financial best interest is to authorize as many treatments as possible.
TPA stands for Third Party Administrator. Its job is to manage all of your claims to keep your premiums as low as legally possible. The TPA should be a watchdog over the medical services authorized by the MCO.
If the TPA and MCO are sister corporations, how likely is it that the TPA will challenge the services authorized by its sister? In my experience, companies that use a TPA and MCO owned by the same corporation will see increases in their claims costs, and may then be eliminated from group rating.
If the TPA offers to manage your claims for a minimal amount, like $75, how likely is it that the TPA will aggressively work to keep your claims costs down? Can a business really be profitable when it gives its services away for such a small amount?

Is bigger better when choosing your MCO?
One of the most important jobs for an MCO is to approve or disapprove treatment requests, which are submitted on a C-9 form. When treatment requests are authorized, the provider treats and then bills for its services. Authorizing treatment therefore authorizes expenditure, which results in higher premiums for employers.
How does your MCO handle treatment requests? Large MCOs want to be efficient in handling the many C-9 forms. Some MCOs use staff members who are not registered nurses to rubberstamp all requests, as long as the treatment can be considered reasonably related to the allowed conditions in the claim. They don’t look at how many of the requested services have already been provided, so they will authorize all physical therapy, chiropractic, consultations, MRIs, CT scans, etc. Your MCO may not tell you when it has authorized treatments; you just get a big surprise when you see the claims costs that caused the increase in your new premiums rates. The MCO may only tell you when they don’t authorize treatment.
Another “efficient” MCO practice is to authorize any and every treatment described in the Official Disability Guidelines (ODG). The chiropractor can ask for the maximum of 12 treatments and get them approved, without demonstrating “functional improvement” after the first 2 or 3 sessions as recommended in the Guidelines. If there are additional conditions later allowed for the same body part, more treatment will be authorized, even though that body part has already been treated. For example, the ODG recommends up to 9 visits over 8 weeks for an elbow sprain/strain. The ODG recommends 9 visits over 8 weeks for olecranon bursitis. Should the provider be paid for 18 visits over 16 weeks, when the same body part is being treated? Is the therapy for sprain/strain really so different from treatment for inflammation of the bursa?
MCOs are paid a percentage of your premiums, so it’s in their financial best interest to approve lots of treatments to increase the claims costs and increase your premiums. The BWC will say that it has “incentives” in place to make sure that doesn’t happen, but it does happen.
Your two best defenses against rubber-stamping are 1) choose an MCO that has nurse case managers review all C-9 requests, and 2) choose a TPA that will be a watchdog over your MCO.

Here’s an example of the BWC pushing its work onto its customers.
The claim had not yet been allowed. The IW needed physical therapy. The provider wouldn’t provide the therapy unless it got a letter from the employer stating that it wouldn’t appeal the claim. To be a certified provider for workers’ comp claims, the provider has to agree to treat the IW as needed for a quick and safe return to work. Obviously, the provider in this example was more concerned about getting paid than providing treatment.
The BWC says that the MCO is required to train the provider.
Here are the problems with this procedure:
The BWC sets the rules for a provider to be part of the Health Partnership Program (HPP) and accepts the provider into the program. The MCO has no ability to discipline the provider if it does not comply. Also, the MCO would have no way of knowing about any other “training” the provider has received from other MCOs. The MCO has to decide whether to spend time & resources on “training” a provider.
The BWC will only step in after the MCO shows what it has done to train the provider and that the provider has continued the inappropriate behavior.
So in this example, the IW is delayed from returning to her full duties, and employer is denied the full value of its employee while waiting for PT to be completed. The provider gets away with its behavior, because it hasn’t refused to treat anyone else that our MCO knows of. The BWC does nothing to demonstrate its commitment to the rules it sets for providers.
Self-insured employers do not use MCOs, so what does the BWC do when they complain about non-compliant providers? The BWC should monitor the practices of all providers that it accepts into the HPP, and investigate when complaints are filed. The BWC should eliminate the providers who refuse to comply with the requirements of the program.